Taiwan Regulator Raises Fund Holding Cap to 25% Under ‘TSMC Rule’

TSMC accounts for about 44.3% of the Taiwan Stock Exchange Capitalization Weighted Stock Index, but domestic equity funds and actively managed ETFs were previously barred from investing more than 10% of their net assets in a single company. The restriction made it difficult for fund managers to mirror the broader market and left their performance prone to trailing the index. Taiwan’s Financial Supervisory Commission therefore revised the rules to give funds greater investment flexibility while maintaining risk diversification.

The commission announced the easing on April 23, 2026, and issued the order, effective April 24. For listed companies with an index weighting above 10%, the fund holding cap was raised from 10% to 25%; TSMC is currently the only company that qualifies. The market estimates the change could unlock about NT$200 billion in potential buying, while TSMC shares touched a record intraday high of NT$2,180 that day.